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OTHER TAXING MATTERS

With

Jack Cohen, CPA

IncSmart.biz Inc11After Selecting an EntityWhat am I about to Receive?Income Tax Reporting FormsPayroll Tax Reporting FormsState Tax Reporting FormsSales and Use Tax FormsPersonal Property Tax FormsOthers

Payroll Reporting940 FUTA941 Federal Withholding and Social SecurityState WithholdingState UnemploymentState DisabilityOthersTax TipUse Payroll companyState and Local TaxesSales taxUse taxPersonal property taxBusiness license or permitWhere People Get In TroubleTrying to Avoid Sales TaxWho is responsible for collecting the tax?What if I purchase merchandise out of state?What is a resellers certificate?NexusWhat is it and how is it determined?United States Supreme Court has held that states can only impose tax or collection responsibility when:There is a substantial physical presence between the state and:the sellerthe transactionthe activityThe state may require out-of-state vendors to provideInformation.NexusContinuedSubstantial physical presence includes:Owning or leasing real estate or tangible personal propertyMaintaining a business location or inventoryHaving resident or nonresident employees work within the stateIncorporating or qualifying to do businessUsing the companys own trucks and personnel to make deliveries into the state on a regular basis NexusContinuedEmployee VisitsPhillip Crosby Associates, Inc. (Alabama-1996) Management Consulting BusinessTelemarketing sales; in-person visits 26/yearDid 69 projects and training over three yearsNexus upheld-considered regular and repeated

B.L. Key, Inc. (Utah-1997)MFG sent 3 supervisors to Utah on 8 trips lasting a week to a monthSupervisors hired 4 employees each tripArgued presence was not regular but sporadicNexus upheld-ruled regular means repeatedNexusContinuedRepresentatives Nexus Out of State Mail ordersIndependent Sales RepSome 800 phone numbersTelemarketers ruled as independent sales reps

Printers NexusApplies to out-of-state companies establishing Nexus By storing paper at the printers locationBy visitations to the instate printerInstate deliveries - How many? Drop ShipmentsNew Business Expenses Start-up expenses

Organizational expenses

Web site expenses

Start Up ExpensesMoney advanced to corporation = loanDeductible upon start of businessStart When apartment is available When open for business When searching for businessCapital Expense Until Start

Business Travel Client calls

Market research

Plan your vacation around business

Tax TipMaintain Good Records Receipts with business reason.Diary Kept Contemporaneously.Primary reason for trip.Ordinary & Necessary ExpenseAnnual Board Meeting Fully deductible

Find a creative location

Successful people travel

The Big Deduction Sec. 179This year:$125,000 up to purchase of $500,000

Family Members as Tax Deductions Children: lower tax deductions

Spouse on payroll

Employee benefits

Retirement planning

Employee Education ExpensesSeminarsConferencesCollege tuition

Employee Benefits Medical Child Care Life Insurance

Dental Long Term Care ChiropracticBusiness Retirement Plans Pension, Sep 401K

Profit Sharing

Defined Benefit Plans

Retirement $ The Ultimate SafeFinal Thoughts Its Your $

Plan, Plan, Plan

Take Action

Alternative Minimum TaxBackgroundTax Preference Items Sch. A Taxes Accelerated Depreciation Capital GainsTo Avoid Keep deductions on page 1 of return.Pension Contribution ChangesDefined Benefit Plan Max. Compensation Used = $225,000 Smaller of 100% of compensation or $45,000401K $15,500 & $5,000 catch upSEP Lesser of 25% Income or $45,000Traditional IRA Lesser of Compensation or $5,000

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